Vivus Diet Pill Sales Rise Rapidly Early in Launch

Analyst predicts that it will take some time before Qsymia records meaningful revenue. Cowen's Simeonidis predicts $1.6 billion in sales by 2019.

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Simeonidis says he believes that Qsymia will be a big-selling drug -- $1.6 billion by 2019. But he also says the ramp-up will be slower than some investors think. Vivus and Arena just won approvals for the first new diet pills in the US in 13 years. Both companies are appealing to doctors' concerns that obesity has become an epidemic, leading to a host of related diseases. The long stretch of time between the new drugs and past approvals is a reflection of the safety concerns associated with these type of products.

"The Qsymia launch will be a slow one, given that the company will have to build out awareness for both the disease and the drug," Simeonidis says.

Vivus is trying to create demand for a drug with physician obesity specialists through a 150-person sales force, which is a challenge, Simeonidis says. He predicts shares will "remain range bound" for the next nine to 12 months.

Meanwhile, Bloomberg reported earlier this month that 30% of health insurers were covering the pill. Qsymia is only distributed through mail order pharmacies and the major players in that business, including Express Scripts (NASDAQ:ESRX), Walgreen (NYSE:WAG) and CVS Caremark (NYSE:CVS), have all lined up to sell the drug, Vivus says.

Vivus began selling its drug the week of September 17. The drug costs about $4 to $6 a pill depending on dose.

Orexigen Therapeutics (NASDAQ:OREX) also is testing a diet pill that it hopes to eventually bring to market to compete with Vivus and Arena's drugs.

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